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Here is a small sampling of the 120+ posts
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Monday, March 24,
Lions Gate: Divergent Squeezes By
The box office numbers are in, and
turned out to be a ... question mark.
A few weeks ago, there was talk of an opening in the $70 million
range. On Thursday (March 20), I noted expectations for a $50
million opening -- I should have been more clear. $50 million was
more the bottom end of expectations. Lions Gate sold off 8% on
Friday (March 21), indicating that expectations for the box office
had basically collapsed heading into the weekend.
hit $56 million for the opening weekend, which is basically in-line
with recently lowered expectations, and, most importantly, not a
bomb. That means a bit more confidence in the already approved
sequel, and there is a sharp relief rally in early trading.
However, I don't think this story is over yet because the opening
weekend was easy. There were a lot of
fans that would have seen the movie even if it had 100% negative
reviews. The next step is to monitor how box office returns fall
Here's a sampling of second weekend box office returns for
comparable films from
The Hunger Games:
The Hunger Games: Catching Fire:
Harry Potter and the Sorcerer's Stone:
I'd say the low -60% range is what investors would like to see.
was an outlier.)
On Friday (March 21),
I backed off shorting Lions Gate
[subscription required] into the weekend because I felt emotion
entered the equation. I wanted to be the smart guy that went four
for four on Lions Gate trades, and shooting for that type of ego
fulfillment seemed unhealthy.
But I'm feeling like my brain's been reset a little bit, and here's
what I'm thinking:
I still have doubts about the sustainability of the dystopian teen
sci-fi genre, and since what moves Lions Gate is expectations for
blockbuster films, it's a little hard to get behind the stock. It's
a long way from 2011 when 99% of investors hadn't heard of
The Hunger Games
You can't compare Lions Gate to diversified media companies like
). It's more like
). You want to anticipate the anticipation of big releases and ride
the wave of momentum buying.
didn't bomb, but it only hopped over lowered expectations. I don't
think that's going to be a sustainable source of excitement, and so
it's back to the sidelines for me.
However, I'm keeping the stock on my radar as there will likely be
trading opportunities on both the long and short sides as the
November 21, 2014, release date of
The Hunger Games: Mockingjay, Part 1
Tuesday, March 25,
Like a Rock
Michael A. Gayed
Emerging markets (
iShares MSCI Emerging Markets Index ETF
(NYSEARCA:EEM)) the last two days have been like a rock intraday,
barely budging with US equities acting considerably more volatile
into quarter end. I very much believe that an emerging market
melt-up is likely coming in the second quarter. With stimulus being
removed in the US (
SPDR S&P 500 ETF Trust
(NYSEARCA:SPY)) and with China (
iShares FTSE/Xinhua China 25 Index ETF
(NYSEARCA:FXI)) beginning to act, odds are rising that money
rotates overseas after a year of wildly irrational relative
movement. To think emerging markets cannot advance in a down US
market is illogical, given that they went down when the US went up.
Valuations are cheap, and the breakdown in biotechs (
iShares NASDAQ Biotechnology Index ETF
)) and other small-cap (
iShares Russell 2000 Index
(NYSEARCA:IWM)) high flying momentum names may force attention to
Brazil, Russia, India, and China. The most telling action is in
Brazil, which despite the S&P's downgrade of its credit to
BBB-, continues to rally unrelentingly. The move I have waited on
for so long may finally arrive.
Biotech leads us lower (IBB is down -2.6%) as the red spreads to
the small caps and high flyers. Banks are starting to get tapped
KBW Bank Index
(INDEXSP:.BKX) 71.50 is the key.
is the same level for the small caps and that's slowly drifting
away to the upside as is 7600 on the
Dow Jones Transportation Average
(INDEXDJX:DJT) and 3640 on
(INDEXNASDAQ:NDX). These are big indices losing support and that
should be respected as leading indicators. If enough of these fail
-- and the banks are by far the biggest tell
-- 1850 on the
(INDEXSP:.INX) will be in Jeopardy.
Click to enlarge
Why did I capitalize Jeopardy above -- where's Vanna White?
Michael Sedacca knows fixed-income and interest rates,
much like his pops
. When he weighs in on things like negative interest rates, I pay
attention (and so should you).
I'm not as smart as Mark Zuckerberg and can't see what he sees.
History will judge his billion-dollar buying sprees as genius or
So, what's the end-game in Russia? Who's gonna blink first? And
where does it go? We don't do politics at Minyanville, but those
answers are gonna impact our financial decisions.
And then there's the chart below. That's the Russell from November
2012. (Remember that?)
(there now) is the 50-day moving average, but that could be the
least of concerns for that complex.
"Parity," through the lens of the November 2012 trend line, is at
. Apples to apples, of course.
Click to enlarge
I hope this finds you well.
Brazil has been absolutely on fire lately. I purchased it back on
February 27, mentioning that I believed the bottom was in there and
now it had the true tests ahead of it, overcoming downward sloping
Today is the day that it is breaking free from the 200-day moving
average to the upside. This is really setting the stage for an
18-month run (which Alex Salomon told me about several months
back). It is very curious that the market appears to be setting the
stage for a correction in the US, while emerging markets are
finally turning the corner.
Perhaps the markets are decoupling as QE winds down, and investors
can get back to a state where diversification can make a
In fair warning, today is not the day to buy Brazil as it is
finally over 70 on the Relative Strength Index (RSI), making it
overbought. I would let it cool off a bit and let it (hopefully)
base above the 200-day moving average before breaking out higher
Click to enlarge
Friday, March 28,
"I bet there is another MASSIVE revolution in Ukraine by the end of
summer with gas prices up 50% and pensions being cut 50%. And, just
wait until the IMF, US, and Troika hit them with austerity, not to
mention food inflation. Think about this, the average pensioner in
Ukraine used to take home $160 a month, now it is $80!" That quip
hit my email box yesterday (March 27), penned by a London-based
investor. Also troubling is the massing of 50,000 more Russian
troops on the Crimean and Ukrainian border, bringing the total to
some 80,000. Certain Washington, DC contacts remain worried about
the upcoming Ukrainian election, believing the vote will tilt
towards reuniting with Russia and allowing Putin to use the same
Crimea tactics to annex the rest of Ukraine. While many of the
experts are concerned about the situation, the stock market doesn't
seem to care. The other major concern seems to be the slowing of
China's economy as China's year-to-data industrial profits rose
9.4% year-over-year versus 12.2% growth in the previous report.
Hereto, the stock market does not seem to care. Those two concerns,
however, appear to be the biggest bogeymen currently, and they are
likely responsible for the restless rotation that has been taking
place over the past few weeks in the stock market despite the
ability of most of the major indices to hold up rather well.
Indeed, many of last year's leading stocks have broken down in the
charts and, in the process, have traveled below their respective
50-day moving averages. The past two sessions have actually seen
the tech-heavy NASDAQ-100 break below its 50 DMA, which is not good
While none of this portends a massive stock slide, it is a reason
for caution in the near term. As Andy Adams wrote
S&P 500 has been trapped in a 40-point range over the past
month and now sits in the middle of this channel, while the NASDAQ
and Russell 2000 have already broken down to make lower lows. Since
the S&P is not yet confirming this breakdown, this divergence
among the averages could be interpreted two different ways. The
first way is that the recent underperformance by the former leaders
is signaling underlying weakness that will eventually bring the
large caps down with them. The second way is that the recent
sell-off in select stocks has been nothing more than profit-taking,
and the overall market will reassume its ascent once this selling
I would add that yesterday the S&P fell below a short-term
rising trendline and that there is a full charge of energy built up
in my internal energy indicator. A breakout above 1860 would
suggest that the energy will be released on the upside. Below the
1835 to 1840 range would imply the opposite.